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Gov. Mike Braun made promises on the campaign trail to make large investments in school vouchers and police while reigning government spending. His first budget proposal reflects those priorities and offered a few surprises.
Braun’s budgetary staff presented his proposal to the State Budget Committee on Jan. 16, and the House recently introduced his spending plan in House Bill 1001, although it’s expected to undergo changes as the bill progresses through first the House Ways and Means Committee and then the rest of the Legislature.
“We’re working closely with the governor,” House Speaker Todd Huston told reporters Thursday. “We really appreciate his efforts, and I think he’s got a fresh set of eyes looking at how things can be done differently.”
The House Ways and Means Committee began budget hearings with members of Braun’s cabinet this week. The House will amend its version of the budget into HB 1001 closer to the session’s halfway point in February. The budget is expected to be ready for Braun to sign by the end of April.
Here are eight things that stood out in the governor’s first budget proposal.
Administrative costs vary
Braun previously laid out an ambitious plan to cut current state government spending by $700 million, including $180 million in administrative reductions. And he has challenged his cabinet members to find 5% savings in each of the areas they oversee.
His budget plan reflects cuts for several departments, with flat funding for others and increases in areas that support some of Braun’s larger goals.
Starting with his own office, Braun seeks to decrease operating funding by $170,000. The Secretary of State’s Office and Attorney General’s Office allotments stayed the same.
The Indiana State Police would see one of the larger increases in operating expense with a $29 million jump to $190 million annually. The Department of Correction, which operates the state’s prisons, would see a $9.1 million increase in its main office operating expenses. It is proposed to receive $39 million per year—an amount that does not include the operations of the prisons, which are funded in separate line items.
The Indiana Economic Development Corp.—the state’s job creation agency—would see a $2.2 million drop in operating expenses along with a reshuffling of its funds and grants programs.
The Bureau of Motor Vehicles would also see one of the larger reductions—$1.1 million per year. Others agencies with proposed cuts include the Department of Environmental Management, the Department of Homeland Security and the Department of Agriculture.
One-time funding no more
Lawmakers had more cash to splash last budget cycle, especially after revenue surged above expectations during pandemic years. Braun has scrapped several investments that landed in the budget in recent years.
The most high-profile of those was Martin University’s one-time funding not being renewed. The state’s only predominantly black institution received $5 million over the last biennium to attract students seeking to study high-demand professions.
House Speaker Todd Huston said it was clear Martin’s funding was a one-time investment.
“We talked about that at the time,” he said. “That was not a long term funding source.”
The Legislature also designated $5 million that universities could tap to support minority and first-generation low-income students. Braun also did not include that in his budget.
The decisions drew ire from local advocates and Democrat Rep. Greg Porter of Indianapolis.
“I continue to delve deeper into Braun’s budget proposal, and each time I find something new that’s disturbing,” he said in a statement. “He has once again demonstrated that one of his priorities is slashing programs that benefit minority populations.”
Money found for vouchers
Braun’s major education promise to Hoosiers was to remove income limits from the state’s private school voucher program. The program was nearly universal before, allowing the children of parents who make less than $220,000 to be eligible.
The major hurdle for Braun and lawmakers was to find millions of dollars to fund the expansion in a year when money is tight. Through cuts elsewhere, though, Braun put an additional $540 million for K-12 education over the biennium that is expected to pay for expanded vouchers. He also proposed a $50 million “Freedom and Opportunity in Education” two-year line item, though details have not been released on its purpose.
Democrats and several education advocates are warning that public schools will not receiving enough funding under Braun’s proposal.
And more vouchers
Two targeted student scholarship account programs also saw major support in Braun’s budget proposal.
The Education Scholarship Account program increased from $10 million to $25 million per year. The accounts support education-related and tuition expenses for students who need special education services; siblings can also partake in the program.
The Career Scholarship Accounts program offers high schoolers up to $5,000 each year to offset expenses for apprenticeships. The accounts were a new expense last budget cycle and had a $10 million allotment in its second year. The line item will get a $1 million bump each year.
Treasurer Daniel Elliott, whose office oversees the programs, applauded the investment in a statement to IBJ.
“These programs have grown rapidly because parents are seeking more educational options for their children,” he said. “I’m hopeful that with Gov. Braun’s support, we can increase support for both ESA and CSA and allow more children to have access to these educational opportunities.”
Public health funding cut
In 2023, lawmakers heavily increased the amount of public health funding by 1,500% to create the Health First Indiana program. All 92 counties eventually opted into the program
Lawmakers set aside $225 million over two years for local public health investments as a means to improve Hoosiers’ health outcomes, which are some of the poorest in the country.
Braun’s budget tapers that investment, lowering the funding from the $150 million in the second year to $100 million a year.
Tourism spending reeled in
The state’s tourism arm, the Indiana Destination Development Corp., would see its funding drop from $20 million a year to $5.6 million.
The state Legislature formed the IDDC in 2019 with a $20 million per year influx to better develop the state’s brand and develop tourism opportunities. The former Indiana Office of Tourism Development received about $4 million a year.
Local sports and tourism leaders are hoping to secure additional financial help to attract big events. Braun’s budget allots $3 million over two years for the fund—a drop from $10 million it received for 2023 and 2024.
Under the budget, the White River State Park would see an additional $15 million in 2026 for redevelopment matching funds.
Child care sees support
Waitlists for child care programs, including the Child Care Development Fund, would be lifted through a $362 million investment. The budget also would establish a new local child care assistance program with $2 million a year; more details about the program have not been released.
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